IARN — The American Farm Bureau says USDA’s recent trade figures show China is purchasing U.S. ag commodities at a faster pace than 2020.
The U.S.-China Phase One Trade Agreement – signed during the Trump administration – is set to expire in early 2022. American Farm Bureau senior economist Veronica Nigh says this year’s trade numbers are better in 2021 than at the same time last year with China.
“Thus far in 2021, which is data from January through November, we’ve exported 30 billion dollars to China. That’s up 33 percent compared to the same time period in 2020, when we had sold 22 and a half billion dollars.”
However, Nigh says China is expected to fall short of its purchasing commitments in 2021 under the Phase One Agreement.
“The Phase One goal for 2021 is 40.4 billion dollars; at 30 billion dollars, China is relatively close. In December 2020, China bought about 4 billion dollars’ worth of U.S. ag products. Those of you doing the math: they’re about 10 billion short. So far, if the pattern holds, China’s going to be behind in their purchase commitments for 2021.”
Nigh describes a challenging relationship between the United States and China.
“There’s a lot of issues outside of agricultural trade that are significant, a lot of geopolitical issues, which means that though U.S. agriculture trade is incredibly important, you have to deal with a lot of significant political issues before you can start talking about U.S. ag trade. The additional communication and meetings between our government can only be helpful, however. The tariffs continue, but the purchase agreement is over at the end of 2021. That makes the relationship between U.S. and China all the more complicated going into 2022.”
An October 2021 study from the Peterson Institute for International Economics showed China had only reached 62 percent of its purchasing target under the Phase One Agreement.
Story courtesy of the Iowa Agribusiness Radio Network.
Pictured: February 2020 Phase One Trade Deal Signing Ceremony (Photo courtesy of whitehouse.gov)
